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On July 21, 2010, the Securities and Exchange Commission (SEC) voted unanimously to propose a new rule and rule and form amendments under the Investment Company Act of 1940, the Securities Act of 1933 and the Securities Exchange Act of 1934, each as amended, regarding the regulation of distribution fees paid by registered open-end management investment companies, or mutual funds (the “Proposal”). To address concerns of lack of investor understanding with respect to mutual fund distribution fees, or “12b-1fees,” and to enhance clarity, fairness and competition in the sale of mutual fund shares, the SEC proposed new Rule 12b-2 under the 1940 Act to replace existing Rule 12b-1. Currently, Rule 12b-1 directs the way in which a mutual fund may use fund assets to market and sell the fund to investors and how a broker-dealer can be compensated from the fund for its sales efforts.

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